CHULA VISTA –
An old disco party boat mired in south San Diego Bay has worn out its welcome, but the cost to remove it will be steep. Years of neglect have left the boat so fragile it could disintegrate in sensitive tidelands.

The Port of San Diego considers the 120-foot Neptune's Palace, now stuck in shallow water off the Chula Vista bayfront, a blue-and-red eyesore. It is within view of land the port hopes to develop in the next decade.

More immediately, the vessel is killing marine life. The eelgrass – a protected habitat – around it is dead.

Port officials sought proposals to remove the boat but only got one bid, of $281,000, plus a contingency fund. That was more than anyone had expected.

Ellen Miles, a deputy attorney for the port, said the agency is researching how the boat was made and whether some removal can be done in-house. Another option is having the port assume more liability for the job, which would be cheaper than the contractor paying for insurance.

Several buckets of liquid, possibly cleaning solvents, are onboard. There's also a full sewage tank.

“The problem is we don't know exactly what's there,” Miles said. “If it just fell apart out here and it was in the middle of the eelgrass habitat, it would be a problem.”

Overview

Background: Five years ago, a storm blew the old Neptune's Palace party boat into an environmentally sensitive area of south San Diego Bay. After the Port of San Diego ordered the boat owner to remove it, the owner sued, claiming that his civil rights were being violated.

What's changing: One year ago, a federal court ruled in favor of the port, finding that its rules weren't discriminatory. The port, which owns the boat, intends to destroy it, but a contractor said the job will cost at least $281,000.

The future: Officials are working on a cost-effective way to remove the boat without harming the environment.

Neptune's Palace was built about 1985 and owned by Jim Morgan, a party-boat entrepreneur with a stake in Les Girls, a strip club in San Diego's Midway District. Morgan was once described as a South Bay Hugh Hefner because in the mid-1980s one of his boats, The Castle, hosted raucous parties in a spot anchored about 1,000 feet from Chula Vista's J Street Marina.

The three-story Neptune's Palace was decked out with shag carpet, disco balls, hot tubs and an underwater dance floor with observation windows. Like The Castle, it lacked an engine, so Morgan kept it anchored at various spots in the bay including the Coronado Cays, with party guests brought out by ferry.

In the 1990s, Morgan began living on the vessel, which he kept in an anchorage site called A-8 off the Sweetwater Channel.

In 2002, Morgan donated the boat to a church. Neither owner had permission to anchor it in the bay.

The boat broke free from its illegal moorings in A-8 during a storm in January 2003 and drifted south to a spot about a half-mile west of G Street in Chula Vista, where it still sits. The port has been in court battles since 1990 to have the boat removed, and last year it took possession of the vessel in a settlement.

The port has removed most of the abandoned boats in San Diego Bay, although some sunken ones remain in A-8, a formerly free anchorage that eventually became known as a boat wasteland.

The port has spent $1.15 million since 2004 on contracts with Marine Group LLC, formerly known as the South Bay Boat Yard, to remove boats from throughout the bay, including 12 sunken boats in A-8.

Since the program began, 590 boats have been impounded and returned to their owners, auctioned off or demolished. The port also purchased some boats from their owners.

Neptune's Palace may be the most difficult – and expensive – to remove because it is in a protected habitat area. Small fish spawning in the eelgrass beds are food for species including the least tern, an endangered bird.

The port also impounded The Castle in 2002 and spent about $35,000 to destroy it, Miles said.

In 2002, Morgan donated Neptune's Palace to James Ward, a pastor for the Mindbridge Church of the Open Mind on Logan Avenue in San Diego. Ward used the boat for church services, weddings and youth events, said his attorney, Gregory Garrison.

Garrison said Morgan's passion was providing bay access to people who could not afford yachts and waterfront homes.

“He's been fighting with the port about access for years, because he believes their restrictions are discriminatory and only allow people of a certain economic position to use the bay,” Garrison said.

Morgan and Ward did not respond to requests for comment.

In 2003, the port ordered Ward to remove the boat, but he refused. Ward claimed the port seized the outriggers he needed to move the boat, court documents show. Port officials threatened legal action, saying the boat could be impounded at Ward's expense.

In 2004, Ward sued the port in federal court, saying port restrictions on anchoring were designed to discriminate against black church members who used Morgan's boats. He cited port rules that banned vessels longer than 65 feet – which included Neptune's Palace and The Castle – from A-8.

The port responded with a counterclaim to force Ward to remove the boat.

U.S. District Court Chief Judge Irma Gonzalez ruled in January 2007 to uphold the port's anchoring regulations. She wrote that the court “found no intent to discriminate or racially disproportionate impact.”

Ward then agreed to sign over the boat's title to the port. He is appealing the discrimination case to the 9th U.S. Circuit Court of Appeals.

“It was a good victory,” Miles said. “Now, the issue is getting it out of the bay.”

Neptune's Palace, which was built around 1985, had shag carpet, disco balls, hot tubs and an underwater dance floor with observation windows. It lacked an engine, and party guests were delivered by ferry.